Former CEO of Uber and one of its co-founders, Travis Kalanick has been busy building his cloud kitchens venture, City Storage Systems, which runs CloudKitchens. And of the several international destinations Kalanick is entering with this business, India is a key focus market. According to an Economic Times report, City Storage Systems has created an organization in India with a General Manager appointed for the Mumbai region.
Former TexMex Cuisine India CEO Ashish Saxena is the general manager for Mumbai.
To begin with, Kalanick’s venture recently picked up a small stake in a local food brand Rebel Foods, which runs Faasos and other delivery-only brands, taking orders on Swiggy and Zomato.
City Storage Systems is now looking to set up cloud kitchens in India starting with Mumbai. What CloudKitchens offers, is a customised space for food business to set up and operate delivery-only kitchens.
According to the company website, “everything about the restaurant experience is designed for walk-ins and reservations. And while delivery is an increasing percentage of the business, many operators are forced to trade-off the dine-in experience with a booming delivery business.”
The company is thus offering a space to cloud kitchen businesses and restaurants to not only help reduce real estate and labour costs, but also yield higher margins.
“Rather than the +$1 million upfront to build out a brick and mortar restaurant, get started in a CloudKitchen with a small deposit plus the cost of your specialized equipment,” the website states.
The company is talking to restaurant chains, major food order delivery companies like Swiggy and Zomato and real estate developers as well. Once it has created the base in Mumbai, City Storage Systems plans to expand to Bengaluru, Delhi and Hyderabad. Once it has a multi city presence in India, Travis will reportedly hire a country head.
According to a recent report appearing in the Wall Street Journal, Kalanick’s venture CloudKitchens has been valued at $5 billion and it has raised $400 million in funding from a sovereign wealth fund from Saudi Arabia. City Storage Systems later wants to expand to the middle east as well.
Travis Kalanick is said to be adopting some of the practices he had set up in Uber in his new venture as well. The pattern of a city’s operations being headed by a General Manager is from there. The full team in each city will comprise personnel entrusted with the functions of sales, operations, business intelligence, policy and analytics.
While operations will be lean, each city will have sales, operations, business intelligence, policy and analytics executives, ET quotes a source as saying. This venture will have its base in Los Angeles.
One interesting point raised by some restaurants appears to be that they could sign up with CloudKitchens and escape the tussle between the rivals Swiggy and Zomato for exclusivity. Incidentally, these food order delivery companies themselves are setting up their own captive cloud kitchens to improve on their profitability.
Kalanick parted Uber following several allegations and he received $1.4 billion from the stake he was holding in Uber. He floated an investment arm 10100 and through it made an investment of $150 million in CloudKitchens. He wants to take the business to several countries starting at home in the US and on to the UK, Singapore, South Korea, China and India.